Monday, 10 October 2016

Democracy is dead if parliament meddles with Brexit


Yesterday's debate in the commons was instructive. I heard only one mention of non-tariff barriers. What matters is the way it was said. The mention of the issue was a passing reference to acknowledge its existence but we saw no further discussion. To our MPs the term "non-tariff barriers" means "all that other stuff". And that is cause to worry.

Readers of this blog need no introduction to what "all that other stuff" entails. We are talking about multiple cooperation programmes and entire sectors of integrated governance which, by a long way, dwarfs the issue of tariffs. If we are breaking away from the EU then we not only need a plan for a corporate de-merger of the institutions and agencies, we also need replacement institutions and governance frameworks - for which there is no plan at all.

That should be a major cause for concern since even if we remained in the EEA we would still find a whole tranche of "other stuff" to address. What seems to be the case is that MPs believe single market membership means that we do not open these issues up for consideration. To an extent they are right in that if we are going in for an item by item negotiation then we will be here forever. That is not the complete picture though, and is no excuse for not knowing what is inside each Pandora's box - which MPs clearly do not.

What we see is a fumbling band of incompetents grasping at the issues with no real understanding of the terminology. That much could be forgiven at the beginning of this process but we are now rapidly approaching the point of no return and it would appear that MPs have made little or no effort to get a grip of the substantive issues. They are severely out of their depth. They don't know - and they don't want to know.

What this tells us is that the MPs who have been telling us that the EU is vital to our influence and prosperity have little idea what the EU is, how the systems work or the depth of integration. They are not up to the task of holding it to account. All they know is that retaining the single market lets them off the hook. That is no basis to give them a say in the Brexit process. They have forfeited that right by way of their own voluntary disengagement.

What motivates them is that they have some idea that leaving the single market is complex and will mean taking a a hit to the economy. Fair enough. They do not know where or how, and they are looking in the wrong places for information. That to them though is a secondary concern. The attempt by parliament to have their say is not an honest one.

They may mouth the platitudes of respecting the vote but I do not for a moment believe that the Labour centrists intend to respect the vote nor can we expect honourable behaviour from the SNP who have thus far used any EU debate as a platform for childish virtue signalling. Were it a case of parliament seeking to act as a corrective to the government I would have some sympathy - but these are not people intent on doing as the public have instructed. They want the power to block Brexit.

In this, it is not the sovereignty of parliament that must be respected. It is the sovereignty of the people. It is the moral duty of Mrs May to uphold the referendum verdict and safeguard the sanctity of that vote. Parliament cannot be trusted. Parliament does not represent the people - and if they have so little regard for parliamentary sovereignty that they would hand powers to the EU without question then there is no reason to take them seriously. So it is now a matter of trusting Mrs May. I can live with that.

The type of Brexit we get is all but decided. The battle over hard Brexit was the Tory leadership race. May vs Leadsom. The hard Brexiteers backed the wrong horse and Leadsom has been silent ever since. The Brexiteers have been on a tight leash with every unguarded assertion being countermanded by May. Mrs May has her own ideas of what Brexit will look like and they differ from her lunatic fringe. That's good enough for me.

In this she has made her promise to the public that Brexit means Brexit and so a leap of faith is required. We either trust Mrs May to deliver or we trust parliament. It's a no brainer. If one must trust a politician (and we must) then it's Mrs May every time. She may not know the issues as well as she should but if she knows enough to distance herself from the Tory Brexiteers then she at least knows some of the right things.

I would perhaps back parliament were there a real risk of a hard Brexit but hard Brexit is a media contrivance based on their feeble command of the issues. This is massaged by those who see it as an opportunity to give parliament a chance to meddle. I'm not buying it.

But this all underscores how deep this runs. If we give parliament the opportunity to trespass on the verdict of the referendum they will vote to block or delay. It's the only reason they want their say. They will invent any reason to do so. That then creates a constitutional crisis where the ruling class believe that they have a right to disregard the will of the people. That could well have severe and terrible consequences.

This is no longer a question of EU membership. This is about an intolerably aloof establishment intent on ignoring the public - not just on this issue but any you care to mention. The public are not involved in the decision making and there is no real communication between the governors and the governed. They think they know better than us - but actually, as per the Matt cartoon above, ordinary members of the public on social media demonstrate that they have a firmer grasp of the issues than the politicians or their special advisers.

What is at stake here is profound. It is a test of the relationship between the people and parliament. A contract was drawn up between the people and the government that their vote would be respected. If parliament seeks to tear up that contract then their authority ends there. Civil disobedience then becomes a moral obligation - and I won't be surprised if somebody takes it further. I even understand the impulse. If the message from parliament is that our vote only matters when they like the result, then there is an obligation to remove them by any available means.

And this really underscores why Brexit is such a divisive issue. Ultimately it's about power. Who wields it and in what circumstances. Parliament handing over powers to Brussels without our consent is intolerable but parliament standing in the way of retrieving those powers ultimately says that the people are not sovereign. That makes parliament the weak link in democracy, not the EU. Ironic then that an unelected prime minister should be linchpin on which the fate of British democracy rests.

We did not leave the EU only to put the power in the hands of parliament. We must take constitutional reform further. Parliament is a necessary evil but it is still evil. We have wrongly fetishised parliament when in fact it is a dictatorial body. The fact that we can reshuffle the dictators every five years is nether here nor there. The power still does not reside with the people and Brexit very much exposes that - not through the actions of Brussels, but through the actions of our MPs. The servants believe they are the masters.

Cromwell said an immovable parliament is more obnoxious than an immovable king. I see no reason to split hairs. A dictatorship is intolerable regardless of who is dictating. The thin mandates that MPs enjoy does not come close to the mandate that Brexit has. If these lowlifes use their powers to sabotage Brexit then let the tumbrels roll. If our voice no longer matters then the social contract is irretrievably shattered.

Hard Brexit is off the table completely


I watched David Davis give a statement to the commons this afternoon. Twas what you might expect. Reiteration of what we already know. Davis argues that we will seek the best possible access to the single market. The evasiveness is telling. Neither May nor Davis have explicitly ruled out membership of the single market.

For reasons that escape me the media still seems to think that means a hard Brexit. But given The Leave Alliance was the first to identify that Brexit is a process and that there is even the possibility of a soft landing, we have more right than any to define those terms. We took the view that hard Brexit was leaving the EU without a negotiated settlement, relying on WTO rules without invoking Article 50. That is most certainly out of the window. There will be no hard Brexit.

But what the media thinks is a hard Brexit is any Brexit that does not mean retaining membership of the single market. So what does that look like? Well, everybody is determined to have no tariffs with the EU, but that doesn't even begin to cover the rest of the relationship and since we have no administrative capability to take over a number of functions like fishing we will at the very least need an interim deal on that.

In this afternoon's debate we heard nothing about the European Medicines Agency or the European Food Safety Agency or the Single European Sky. Things most definitely will fall apart in a bad way if we don't have an agreement for that so we will at the very least be negotiating some kind of long term continuity. Then on top of that there are the other peripherals which total over three hundred different policy areas. These are things that literally cease to function without an agreement.

Meanwhile we have yet to devise our own customs codes and processes and so we need a while to come up with something to plug those procedural gaps. That none of this was mentioned in parliament is a testament to the low grade vermin we have for MPs and their parasitical advisers.

What it means is that if our inept government has not considered these things then they will be sprung with a few nasty surprises during negotiations and will need an emergency fall back position in order to keep things as they are for the time being.

This is what we would very much describe as "the British option" where we attempt to negotiate sector by sector looking for parts of the single market that we don't want. Which won't be very many by the time we are done. And this is why it won't be a hard Brexit. Worst case scenario is that we end up out of the single market with ninety percent of the functionality still in place having paid a heavy price in concessions to get a reduction in freedom of movement. It won't be a hard Brexit though. It'll just be a cock up.

It could actually be that the EU is not minded to let us prat around like this and insist on EEA membership at least for the time being since our time is also their time. It's really up to the government then to explain why ten years of uncertainty for a bespoke deal is better than the EEA when there is so little functional difference.

Whichever way you look at it, in order to retain the MRAs relating to our Authorised Economic Operator status, we will be maintaining regulatory equivalence. Much of what we bring on to the statute book by way of the Great Repeal Bill will stay unchanged until such a time in the distant future where we have the parliamentary runtime to take a second look. Then when you look at our international obligations and other trade agreements based on mutual recognition, the chances are that technical regulation stays much the same.

The short of it is that the Brexit that the hard right fantasists wanted is dead and has been dead ever since Mrs May took control. We will have a negotiated exit which by definition is not hard Brexit. The only question now is whether we will go to extended lengths to reinvent the wheel. For the time being the remainer media is still determined to maintain the narrative that full freedom of movement is necessary in order to remain a member of the single market and so if they wanted an EEA Brexit they have soiled their own nest.

Meanwhile, it looks like Vicky Ford MEP has picked up on the Lichtenstein Solution which Open Europe is so determined to rubbish having completely misunderstood it. It looks like we have a way to go before they realise how few options we have and they will try it the hard way before waking up to reality. It is not a question of soft or hard Brexit, it is only a question of whether Mrs May's advisers are better informed than is immediately apparent.

Were I to speculate I would say that Davis is under strict orders from Mrs May not to rule out the single market, keeping it as a reserve position for negotiations. She might well intend to go for a single market agreement but is in no hurry to give her malevolent Brexiteer backbenchers the chance to rock the boat. That's what I would do. The only absolute certainty is that hard Brexit is not on the table. That the media thinks it is, is all the proof you need.

Saturday, 8 October 2016

Hard Brexit is media mythology

I've been a prolific social media user for several years and I have been hyperactive over the course of the referendum, but lately I've slowed down considerably. There's just nothing worth getting worked up about. The media has decided that Brexit will be a hard Brexit purely on the basis that Mrs May has made a big deal about fixing immigration. In the binary world of the media this means an exit from the single market.

In reality though, we would have a hard time leaving the single market and whatever we come away with will be close to membership of it if not actual membership of it. It's simply a matter of doing the math. Mrs May's "great repeal bill" adopts all EU law for the time being. That tells you that we will maintain regulatory equivalence with the EU. That is the foundation of a comprehensive agreement. Meanwhile if you read the words of Mrs May with any skill you can see that she has crafted every statement to mean everything and nothing. There is nothing concrete to suggest a hard Brexit.

The problem for us is that when the media decides that Brexit will be a hard Brexit the markets tend to follow. A lot of harm is done by way of misinterpreting the signals. Meanwhile it serves the interests of remainers to catastrophise Brexit in a last ditch effort to avert it. There's really nothing left to do except sit back and watch them make prats of themselves.

I am now confident that Brexit will be a fairly pedestrian affair where the worst effects of Brexit will be more a consequence of the hyperventilation surrounding it than any actual political transaction. The real effects of Brexit won't be felt for quite some time and will manifest themselves in more subtle ways. As to the short term effects it's difficult to know what is attributable to Brexit and what is part of an unfolding global economic retrenchment. It rather looks to me like the whole world is going to hell in a hardcart at the moment.

For the time being one might as well withdraw from the field and enjoy the chaos. Watching the pathetic remainers gear up for a hard Brexit fight that isn't going to happen is truly hilarious. They're going to dash around like headless chickens making something of nothing. Victims of their own incompetence. The hard Brexiteers have written themselves out of the script with their infantile ideas and the worst of them are now shoved to the margins. Mrs May's broadside at libertarians was an indicator.

In this you can try and argue the toss but there's no real way to explain it properly through tweets and in the end what difference does it make? The narrative survives because they need it to survive. Without an imaginary threat there is no "cabinet splits" pantomime to play out. As usual we are witnessing a politico-media class living in a parallel dimension. The only "cabinet rifts" we will see will be bickering between the extremes of the losers who dont say in it. Mrs May is the boss. Nobody else matters.

But then you can see why this parallel universe exists can't you? If you take a cold and sober analysis of events there is actually very little to report on. Nothing tangible has actually happened and is not going to happen any time soon. The Brexit immigration debate is merely a vehicle for virtue signallers and the noise from the Tory conference will be forgotten by this time next week. I am sorely tempted to close down all of the Twitter accounts because it's all so mind-numbingly tedious.

For the time being all we can do is speculate but the idle ill-informed speculation of the media simply isnt worth the bother. For as long as there is a financial incentive to remain ignorant there is little chance of the debate progressing and nothing is served by engaging. I can think of better ways to waste time.

Thursday, 6 October 2016

Brexit: unplugging from the matrix


You've all seen The Matrix. You're offered a choice. Take the red pill and you're shown the full painful truth of reality - and suffer the consequences, or take the blue pill and stay living in a pretend world in blissful ignorance. Sound familiar?

It should because that is what Brexit is. A wake up call. We chose the red pill. We've awoken from a forty year slumber to discover that things are not ok, we're not in control of those things we've ignored, and those realities we have swept under the carpet are now in full view of everyone. We have chosen to confront reality rather than evade it.

No longer can we pretend that Europe is a perfect union of convergent peoples and politics. It never has been and likely never will be. By leaving the EU we learn the consequences of our blissful slumber and we see that whichever way we turn there are choices we don't like. Things we would rather not deal with.

Some would have it that we are "edging horribly towards xenophobia by the day"; that somehow a simple vote has unleashed a demon. But what if it was there all along and we just chose to ignore it? What if by ignoring it we made it worse? Even before Brexit the mood was cultivating an ugly resurgence of blood and soil Scottish nationalism - and in the end Ukip got its referendum by exploiting a similar constituency whose grievance had little to do with the EU.

The truth is that there was always a growing sense of unease at the existing political settlement. In the run up to the election the debate was all about the "establishment" in which the EU barely featured. Had we not had a referendum, right now we would be a continuity mode with politicians merely mouthing platitudes in recognition of the growing disenchantment but doing nothing about it. In this you can bet that Jo Cox would have been murdered irrespective of a referendum.

I would even say the implosion of the left was a long time coming too. The political settlement was decaying to such an extent that it really didn't take very much for Labour to be captured by a small and motivated activist base. A healthy political party should have seen it off with ease.

I have seen countless tweets expressing shock and exasperation with the events of 2016. It has been something of a ride. And to most on the remain side it still comes as a shock. They never saw it coming because they never understood what was happening. Now that it has they last thing they want to do is acknowledge it. They will do anything to go back to how things were. Blissful ignorance.

As Morpheus says in The Matrix, "You have to understand. Most people are not ready to be unplugged. And many of them are so inured and so hopelessly dependent on the system that they will fight to protect it". And fight they will. It is too late now though.

Unlike the Matrix, though, we cannot erase the memory of events. There is no putting things back how they were. There is no pretending that it never happened. Things cannot go back to how they were. Once you acknowledge the elephant in the room it cannot be unseen.

Now though we have a real fight on our hands. We have dispensed with the old political settlement and now we must build a new one. Mrs May has made her pitch for a more authoritarian government reversing much of the "neoliberal" measures of the last decade. She sees no ideological barriers to intervening in the energy markets and she is prepared to do damage to the economy in order to satisfy the malcontents. She's gone in for small-c conservative social policy and old Labour economic policy. The public seem to support it. Troubling isn't it?

The battle we now face is a battle to preserve the best of what we have accomplished in the last twenty years while creating a society that better reflects the people who live in it. That progressive majority that the establishment assumed was on their side does not exist and remainers are going to have to wake up to that fact.

This is a battle most would rather not have. For those with a disengaged, comfortable and insular life there was never any real need for political upheaval. If you live your life in blissful ignorance paying little attention to politics (or the EU) and have no real concerns beyond your own narrow self-interest then something as vast as Brexit presents you with things you don't want to think about - and would rather not engage in. Well really that's just tough.

It seems to me that one universal truth in life is that if decisions are deferred for long enough then usually they decide themselves. This is that moment. The decision has been made and we've taken the reality pill. "Buckle your seatbelt Dorothy, 'cause Kansas... is going bye-bye!".

The biggest benefit to Brexit of all


This link directs to an entertaining evisceration of Chris Grayling after having remarked that Brexit means we can dispense with EU rules governing railway platform heights. One really wonders that this is the sort of burning issue that motivates politicians to bring about the biggest political upheaval since the war. I suspect though, if we scratched the surface we would find the issue is multifaceted and part of an overall European transport strategy where we could find some legitimate cause to complain if we looked hard enough.

But it's unfair to pick on Brexiteers for not knowing where various rules and regulations come from in that ignorance over technical rules and standards can be distributed fairly evenly. In fact, the only mainstream media hint that there are other players at work came just two days before the referendum with a post from Christian Friis Bach, Executive Secretary of the UN Economic Commission for Europe, penning for the Huffington Post in which he observes that cucumber marketing standards are in fact a product of UNECE and not the EU.

"The cucumber standard is a good standard. And the world needs significantly more cooperation on standards of all kinds, be it in the UN or in the EU. And even if you do not agree, then remember if you hear the cucumber critique: do not blame the EU. Credit the UN."

If our media was adequate to the task it would not be speaking of EU regulations and instead properly identifying the source but UNECE is only wheeled out when politically convenient. The same can be said of politicians. That then begs the question as to whether we have any business ceding power to the EU when our politicians don't know what it is or what out does and in what circumstances. For sure, the Brexiteers have been caught out by their own ignorance but that ignorance is matched by those remainers who think that the EU is the source of regulation.

Now that we are leaving we landed with the task of sorting it all out. First up we have to separate fact from fiction and in due course we will discover that our international obligations and trade commitments mean that there is little or no scope for divergence in or out of the single market.

When the penny does drop it will be the remainers once again making the running. They will crow that Brexit doesn't mean "taking back control" after all and that we are still lumbered with the same technocracy only we will take it direct from the source instead of via the EU. They will gleefully parade this fact to all who will listen. The sharper ones among them, possibly Ian Dunt (when he's finished catastrophising Brexit as though it were the rise of the Fourth Reich) will then notice the means by which such rules end up on the statute book.

By way of various statutory instruments we adopt whole tranches of quasi-legislation which is as much a WTO obligation as any specific trade deal or treaty. That's when they will once again assume the high ground in pointing out that laws are made without much in the way of a democratic process. That's when we leavers will point out that to object to this means one must also necessarily object to the EU. The presence of a potemkin parliament in the EU where overpaid button pushers vote to lists presented to them by their groups is by no means an adequate system of scrutiny.

What Brexit will reveal is that the EU has concealed the presence of a vast globalised law making machine which has hitherto been obscured by Brussels. If our hack-o-sphere is on the ball they will then be asking where the democratic accountability is in all this. What they will discover, as indeed we have, is that the system is out of control. Not out of control in a hyperbole sense but in a very real sense that it is vast, extremely active and nobody is paying it any real attention.

When our political machine does finally wake up to what has happened they will then begin to realise the obsolescence of the EU, along with the vast potential of what is developing in its place. By way of being out of the EU we will have the right of initiative on all the global regulatory bodies and sufficient clout to sponsor new infinitives. In this they will also wake up to the fact that though we have certain obligations we do have the right to opt out if we so choose. That is a degree of control that underpins the real point of leaving the EU.

Brexit is not petty griping over cucumber standards or railway platforms. It is a means to address a profound change in the way government now works. It used to be that governments would devise their own laws and technical standards in conjunction with domestic technical bodies. This is no longer the case. There is collaboration at the global level to bring about a global rules based trading system governing everything from cucumber standards to major banking rules and all points between.

As much as the EU is a recipient of these global rules, so is everyone else. Governments of all sizes are law takers, not law makers. That changes the very nature of politics whereby politicians are not legislators, rather they are goalkeepers to protect us from bad and damaging rules. This is a task for which the EU has proven inadequate - not least when the EU is driven by supranational ideology rather than the common good.

Many have remarked that Brexit throws the entire system into chaos - which is in their view a reason to fight Brexit. In my view it is all the more reason to do it. Much of the law we abide by was either settled decades ago or has been implemented by way of automatic instruments meaning that much passes without our politicians even being aware of them, nevermind having a coherent idea of their origin and function. By the end of the Brexit process we will find among the media and our political class that we have acquired an institutional memory of where laws come from and how they work. Something that has not been present in political discourse for some time.

In this the political discourse will have changed whereby we view the EU in the proper context as one of many global organisations where the nation state has become a contracting party in a global corporate ecosystem where global private regulators and corporate trade alliances have equal, if not greater status. Only when we are fully aware of what has transpired over the last decade or so can we rise to the challenge of mastering it and controlling it. For too long we have been a silent passenger in the process of globalisation with our goalkeepers leaving the net wide open.

The last thing Britain could do or would ever wish to do is to assume full control and replicate global rules and the notion that we should make all of our own laws is a quaint misconception but ultimately the reason I side with Brexiteers is because the right to say no is that "sovereignty" we need. Globalisation is changing and as emerging economies begin to take more of a role in shaping the agenda, not least with China beginning to make its own demands of the regulatory system, it is right that we have an adequate means of defence and it is necessary that we are full participant at all levels of global lawmaking. We cannot afford to let our horizons stop at Brussels.

It will take a while for the penny to drop and our Eurocentric commentariat have yet to comprehend the shift in the global dynamics of trade and rule-making, but as we begin to dismantle our relationship with the EU it will become clear that we still have the same battles to fight and that democratic deficit between the governors and the governed is as acute as ever. Having that awareness is worth whatever disruption that Brexit may bring. We cannot afford the luxury of delegating it to Brussels anymore. In this game it's either play or get played.

Caretaker May has only one job - Brexit


I was quite pleased to hear Mrs May attack the dogmatic libertarians in her party yesterday. By this she probably means those who have a strong crossover with the Brexiteers on the Tory right. You know. Morons.

Right wing libertarians frown on any state intervention and regulation in general. The problem with our sorry lot is that the general principle becomes a red line. All regulation is bad and all intervention is bad. You cannot possibly have a grown up debate with people who think like this.

We've seen this nonsense during the Brexit debate - about the regulations on vacuum cleaner motors. As readers of this blog are probably aware, these regulations are in fact standards and they do make a lot of sense from the point of view of demand side management - which reduces the need for power stations and all the negative externalities that go with them. Left to their own devices businesses would not innovate - they would produce the worst designs as cheaply as they could for as long as they could get away with it. Intervention is necessary for the common good.

As a country the people have a right to shape and steer their environment and set the rules in which business can operate. Ideally we want as little intervention as possible and only as much as is needed. That however is a difficult estimation in an ever more complex world. Some activities have externalities and risks that must be weighed against others. Some things that normally do not need intervention sometimes do.

So government then becomes the deliberative process of deciding where to intervene and on what basis and for what outcome. To dogmatically insist that government should never intervene is a politically convenient position in that it means you can exist in a world where there is no complexity and there are only absolutes. Only tyrants and children think this way. It's a cop out.

What we do not want is intervention for its own sake and we do not want government creating distortions where none exist without good reason. And though we need regulation we need to ensure the regulation exists for the right reasons while still enabling us to get the best from human endeavours. The most basic guideline is "that which governs best governs least".

But now we are in a world where systems are becoming ever more elaborate and regulation is beyond the capability of politicians to properly scrutinise, we find that industry self-regulation within loosely defined parameters set by politics is the way to go. The less political involvement the better. That, though, changes the role of government from law makers to law takers.

What matters is that we have decent, intelligent and alert politicians capable of examining difficult and detailed propositions to ensure that we have good governance. We need our politicians to serve as goalkeepers. If we have libertarians who insist on little or no regulation then we simply don't get the benefits of good governance and that "free trade" they profess to be in favour of.

Put simply, libertarianism is a non-starter. Governments must intervene and though they intervene badly the only thing worse than intervention is non-intervention. This process is now largely described as managerialism - and we instinctively resist meddling for the sake of ideology. We have seen what socialists can do to economies by trying to impose their ideals onto a system. We do not need libertarians to tell us that socialism is a bad idea.

What worries conservatives though is that Mrs May appears to be parroting Ed Miliband who is very much a social interventionist. This is where I find I have some sympathy with social libertarians in that if you leave people alone they will organise themselves in their own way and will usually be better off for it. May, though, is a known meddler in peoples lives, she is an authoritarian and she does like telling people how to live.

The problem here is that by entrenching dogmatic social policies she could very well nullify many of the benefits of leaving the EU. What the UK needs is to be freed from a lot of the stifling social measures that don't add any real value. Moreover, none of this stuff is going to come for free. Needlessly expanding the size of the state when Brexit is already piling on the bureaucracy is madness.

This all stems from the narrative of divided Britain - and that the government needs to invest more in the regions - and indeed it does - but I have a feeling that leads down that Blairite path of throwing good money after bad to wholly counter-productive ends. May could well end up being the new Gordon Brown when we need a new Mrs T. She's throwing in the towel on fiscal conservatism and trying to spend her way out of problems. That never ends well.

But this all depends on what she does and what she can get away with. To a large extent I find a lot of sympathy with her rhetoric. If being a rich country if it means a permanent underclass of natives while we turn a blind eye to crony capitalism then that's no good at all. I am willing to suspend my scepticism just to see how her vision of an egalitarian meritocracy plays out.

Chances are, though, she will do as all well meaning politicians do. She will spend a lot of money, tinker around the edges, have one or two flagship accomplishments and then make room for the next caretaker. The next ten years will be chewed up by Brexit and that will define Mrs May more than anything.

For a long time to come we will still be operating under EU constraints and no miracle cures are to be found in the meantime. Not until we are free of the EU entirely will we see any economic renaissance. I have a feeling that any borrowing will serve to prop up the normal functioning of government as we see tax receipts declining.

What we heard yesterday, more than anything, was Mrs May putting her own personal stamp on the government sending a clear signal that Brexit does not light the way for an ultra-libertarian future - which is just as well since nobody was voting for that. If that's what leavers had in mind then they should have had a plan of some sort.

As much as Mrs May was signalling her distaste for the Tory right she was signalling to the world that big government centrism is here to stay. Though Sam Hooper is less than impressed I think it marks her as a shrewd politician. Brexit alone is as much radical change as the rest of the world can handle for now.

May will come a cropper by attempting to be all things to all people but for now she has bought the reassurance of those on the left who find themselves without any representation. With the referendum result being an even split and enjoying no mandate of her own she has to seek out a middle way. If libertarians wanted that buccaneering ultra capitalist Brexit then they needed to win by a bigger margin instead of pandering to Ukip.

In the end I think history will mark Mrs May as the manager who delivered a smooth Brexit free of ideological red lines. The unflappable caretaker. We won't see any real radicalism until we are free and clear of the EU and that won't be for a while yet. It may have to go far to the left before it goes back to the boom years. The underlying culture divide is as acute as the economic one. On that score Mrs May might well have hit the right tone by hammering nails into the coffin of the Cameron legacy.

All of this though is noise. The only measure that matters is how May handles Brexit. She can either deliver a safe transitional Brexit or inflict needless self-harm. If her shot across the bow of libertarians was a signal that she won't be including the Minfordists and the Redwoods in the new order then that marks her as a sensible lady. There is a time and a place for ideological crusades. This is not one of them.

Monday, 3 October 2016

Mrs May is giving nothing away


Mrs May would prefer to keep quiet about what she has in mind. Politics, however, does not work like that. She has to say something. And in true conference form she has successfully given the media something to churn over while saying nothing at all.

Her Great Repeal Bill is, as others have observed, an administrative step that would need to happen in just about any eventuality. Something needs to happen to nullify the effect of the European Communities Act. It only suggests a hard Brexit if she is not intent on using Article 50 - which she categorically is intent on using. We will be seeking a negotiated exit therefore the WTO option is dead.

That though should not be news in that the WTO option was so incredibly daft that there was never any serious risk of it happening. Having ruled out a Swiss bilateral arrangement and having ruled out Norway, she has, as EUreferendum notes, ruled out everything. So we are back where we started. Brexit means Brexit.

That said, if we are going to adopt the EU acquis into British law, that suggests at the very least a transitional agreement whereby things stay the same for a time. That is very much the Flexcit approach - that Brexit is a process not an event. This means May will be seeking a comprehensive agreement centred around mutual recognition with all the "free trade" trimmings. Unless these are flexible arrangements it is more than likely that we will continue to adopt "EU rules".

As it happens the EEA is still the best means of achieving that in two years and has all the necessary infrastructure - but the hint is that Mrs May does not seek single market membership while at the same time seeking the same level of particpation. When you add all the peripherals and sundry legacy arrangements it might as well be the EEA for all the difference it makes. So I wouldn't be calling this a hard Brexit by any means.

But then we are still in fantasy land here. Mrs May still wants to have her cake and eat it - and all this is said without any reference to what the EU is thinking. Mrs May seemingly wants the EEA agreement without having the EEA agreement. Now why would the EU want to spend eight years developing something similar purely for the benefit of Mrs May? If the EU consents to such a path (and that's a big if) we will be wasting a lot of time and resource to end up with somethng we could have had without all the fuss.

There is still a way to go before triggering Article 50 and Mrs May is giving nothing away. She has set down a few markers but nothing concrete. She still has wiggle room to use the EEA as a template and the chances are she'll have to. The hard fact of the matter is that Britain needs the most comprehensive agreement possible, if not as a settlement then as a departure lounge. The question is whether May will use the same departure lounge as everyone else or whether she will demand a VIP lounge. She is entitled to ask I suppose.

Thursday, 29 September 2016

Be glad it was Brexit - the alternatives are worse


There have been a number of political maneuvers to try and block Brexit. I can't say they have given me much cause to worry. On the whole I think parliament understands that the vote must be obeyed. There would be a strong showing for any blocking move were it to go to a parliamentary vote but ultimately it would be defeated. Blocking Brexit would have extraordinary consequences.

There was a vote in parliament to grant a referendum. Parliament brought that act into law. There was a referendum in which Her Majesty's Government spent an inordinate amount of money publishing a guidebook which categorically stated that the government would carry out the wishes of the people.

To then tell half the population that their vote doesn't matter sets a dangerous precedent. It says that your vote will only be respected so long as you vote the right way. What it says is that parliament will not tolerate an entirely legitimate vote which they themselves voted to have. There would be no coming back from that. It would be a confirmation that we are ruled rather than governed. If politics was toxic before the referendum then nullifying the largest political mandate ever recorded would have a profound effect.

There are a number of good reasons to leave the EU but there is one often overlooked reason. Ignoring all the technocratic and economic arguments, the issue of identity is not one that can be casually disregarded. Not wanting Britain to be a subordinate of a supreme government for Europe is a perfectly valid reason. The people's right to define their own society is as close as there is to sacred. Without it we are nothing. 

In that regard, I even find cause to agree with Nicola Sturgeon who in the face of damning economic reports says that independence transcends the practical. If people are willing to fight and die for democracy then they will happily shed a few percentage points of GDP for it - not least when none of that money is going in their direction. If MPs took it upon themselves to overturn such a vote they would be offending a core sensibility and I would expect to see MPs put in the ground because of it. 

And that's also why Brexit must happen. The question has been put to me as to whether Brexit is actually necessary. After all the UK is a blocking influence on the EU which stops runaway federalism and the grim prognostications of leavers don't really pan out. I can imagine that it actually grates with Ukip hardliners that the EU isn't as bad as they say it is. For all the predictions of doom it is still with us and the economy is stable even though it is stagnant. 

But if you cast your mind back to the election last year we saw a potential threat to domestic stability. Had there not been an offer of a referendum we would likely have seen a repeat of the 2010 hung parliament, again in a political limbo of centrist consensus politics. Beneath that was a boiling resentment because the current settlement is one not favoured by the people. 

Had there not been a referendum the issue of the EU would continue to bubble under the surface waiting to bring down yet another government. The fact is that all political settlements are life limited and centrist consensus politics after Blair and Cameron had long outstayed its welcome. The referendum though has lanced the boil. Look at where we are now.

All the signals now point to a soft Brexit. The EU question is one that is settled, Ukip is on the wane, and the Tory right have missed their window of opportunity. I recall just after the referendum Tim Montgomerie saying that the Tory right had more power than they had in decades. And for a very short time that was true. Andrea Leadsom, David Davis, Liam Fox were in the spotlight as frontrunners for John Redwood, Bernard Jenkin, Michael Gove, Owen Paterson and Philip Davies. 

Like Ukip though, their lack of planning and intellectual foundation soon become apparent. If they had a vision and a credible plan between them they could have have captured the Conservative Party in the same way that Momentum have on the left. The problem is that an agenda of "pull out as fast as possible at any cost" is simply not one any of us could allow. 

Though Mrs May has thrown them a bone by putting the three Brexiteers into key positions it is quite clear that they are on tight leash and Mrs May is in charge. It's her way or the highway. And now it seems the Brexiteers are going to be neutered politically. Once Mrs May signs the Article 50 agreement, the sacred cow of the Tory right is out of the picture. Meanwhile, Labour is in full self-destruct leaving a moderate Conservative government to get on with running the country. What is not to like?

Perhaps five years ago I would have been sorely disappointed by this but I have come to actively despise the Tory right for their ignorance, intellectual dishonesty and ideological zealotry. They are the mirror opposite of Jeremy Corbyn, caught up in their delusions with no real connection to the present. That they have been consigned to the political wilderness is a good thing for the country. Moving forward, the left will gradually get their act together. Something will emerge from the wreckage of the Labour party and we can all get on with reshaping the country. 

Had there not been a vote to leave the EU Ukip would still be as strong, the Tory right would still have an axe to grind and David Cameron would still be prime minister. Worse still Cameron would be cock-a-hoop. A vote to remain would have empowered him. You can just imagine him lecturing us all in that oh-so-smug tone. "We had a referendum, the people had their say - we are staying in the EU and we're not going keep banging on it". Or words to that effect.

The consequences would be worse than Brexit. A remain vote would be a licence to rub our noses in it and the bogus reform package would continue to be a political device so that the issue could be ignored completely. I can imagine that this would send Ukip into a civil war but not the entertaining death spiral we see today. A defeat on its core agenda would see a complete reset and reorganisation of an insurgent movement. 

Having had a referendum the issue would be unlikely to die. The referendum would have created a new legion of experienced campaigners and effectively create a new generation of EU obsessives for a cause that would otherwise have died out. The issue would continue to haunt the Conservatives and the toxicity levels would continue to rise. 

Ultimately the Brexit vote was not a vote against immigration and in some respects it wasn't even a vote against the EU. It was a vote for change. Change that could not be secured by any other means. We've heard all the empty promises about EU reform and general elections don't have any real tangible effect. This vote is the only vote in my lifetime that forces the government to have a serious rethink about how we do things. 

What we are going to see is political turmoil descending into farce but that doesn't worry me. I'm not even all that bothered by any Brexit recession. Recessions happen. They come and go. We muddle through. What is happening though is something quite extraordinary.

At the moment I spend most of my time watching what the media does and what politicians are saying. They still haven't grasped the basics but they are tossing around entirely new terminology. Trade and diplomacy is now a hot topic. There is a new lexicon in town and there is a space race to be on top of it all. There is, for the first time in a long time, a serious debate about Britain's place in the world.

So far all we've heard from Liam Fox is platitudes about free trade and openness. Though we know that Fox doesn't actually know what he's talking about and we can be quite jaundiced about it, it is still nonetheless a signal to the world who will take him at his word - and in international politics platitudes, gestures and signals are everything. I'm not especially pleased that Mrs May in one of her first acts on the international stage was to sign the Paris Agreement but it was a signal to the world that we are not retreating from international cooperation. It's a price we have to pay to maintain our presence.

For a time we will have to put on a major international charm offensive. I doubt the forthcoming far east tour of the Red Arrows is unconnected. We will also see the Royal Navy putting in appearances all over the place as power projection. The Hinkley Point deal is also another obligation we could not have backed away from and it gives Mrs May the photo opportunities she needs. Though it may all seem thin gruel from the domestic perspective it is these kind of signals that show our intent. 

Though political competence may be in short supply for the moment, we are only just finding our feet in preparing to take control of policy areas abandoned for decades. Just because we lack that competence doesn't mean that we are not going to acquire it. The lack thereof is a lesson in why we shouldn't have joined the EU in the first place. 

We will have a long road to travel before we start seeing any tangible benefits from Brexit - but I find it most gratifying to see the political establishment scurrying around trying to make sense of it all. At the very least there is a new sense of urgency in government that I haven't seen for a very long time.

We may have missed the opportunity for domestic democratic reform and Brexit is not going to be the transformational influence we had hoped but we are witnessing a new level of engagement and, in a small way, a revival of grown up politics. When this is done and dusted we may not have a new Britain but we will have all the tools to do it. The rest is up to us. 

Brexit: the right change at the right time


The expression "free movement of goods" does not mean free movement of goods. Conditions apply. You are free to move your goods so long as they comply with certain standards and have a proper audit trail. Only when all your ducks are in a row can you freely move goods. It used to be that we inspected goods at the border for compliance but now we have regulatory mechanisms like Authorised Economic Operators where trusted traders become their own customs nodes and goods travel from point to point without interruption.

With modern IT systems based on international methods and regulatory procedures, so long as a there is a mutual recognition agreement in place covering standards, inspections and qualifications, free movement of goods extends well beyond the confines of the EU single market.

At the heart of this is a common set of standards which can come from any number of international organisations - some with official stranding, others being international private regulators where their codes and guidelines are embedded in contracts and quasi-legislation. What's interesting now is that any technical regulation from the EU is not so much clearly defined prose as it is an invocation of global rules and standards - as the EU is obliged, like a hundred other countries, to adopt global rules.

In the past the Brexit debate has been plagued by a misunderstanding of regulation. Mr Dyson constantly complains about power restrictions on his vacuum cleaners. He is in fact complaining about EU regulations that invoke an eminently sensible set of ISO standards that force manufacturers to make more efficient designs. Though I believe this particular set of standards was an EU initiative, they were agreed at the global level - where any nation has the right of initiative - if they're not in the EU. Increasingly we find that moves toward regulatory harmonisation start at the very top of global governance, and while the EU is a major play, it is not the only game in town.

In the global arena the EU is up against the USA, China, India but also a number of global alliances and conglomerates where nations and blocs are just one class of global participant. The internet giants have their own alliance which has as much or more clout than most governments. Trade deals are increasingly built up around rights of investors and resemble corporate contracts. MoUs are now as much a part of intergovernmental trade as they are part of the corporate nexus.

The EU is a shrinking influence in all this. Not through its own making but because the system is expanding. The fish stays the same size, the pond just gets bigger. Rather than being the core of the single market it is a player in much bigger region where goods and services travel freely. The AEO system is global and the E-TIR system is being adopted worldwide. We are now evolving into a state where anybody who chooses to comply (and meets the standard) can participate. The EU does not control accessions. It is being displaced by UNECE.

Behind the scenes with very little fanfare countries like Kazakhstan are being brought into the fold with UNECE and Codex working to bring them up to standard so that they can participate. This is complimented by the WTO Trade Facilitation Agreement where there is a global fund for exactly this kind of economic assistance. Britain is already a large donor and that is where much of our aid spending should go. Rather than attempting to bring Turkey into the EU we would do just as well to look at bringing any number of developing countries into the UNECE/WTO/Codex sphere. In order to achieve free movement of goods and services worldwide we must focus our efforts at the global level.

But this is why talk of leaving the single market is pointless.We could leave the single market but we still have to regulate and we are still obliged to conform to global standards so there is very little point in replicating all that work. Since there is little the European Parliament can do to tinker with such regulations short of vetoing them entirely there is no real worry. Being outside of the EU gives us the necessary powers of veto - but since we will have an enhanced voice at the global level we won't need to use it often.

The idea that we would leave the single market in order to deregulate is one twenty years out of date. Classic eurosceptic believe we can move out of the EU sphere and into a big wide unregulated space where we can do as we please. It simply doesn't exist. Regulatory globalisation and harmonisation of customs is here to stay. And as much as the eurosceptics have the wrong idea, the EU is equally backward in seeking to cordon itself off as an exclusive club.

The main reason the EU is using brute force to get African trade deals to pass is because it sees this organic system as a threat to its existence. And that is not far off the mark. For Britain it then becomes a question of which we would rather prevail; a rapidly expanding organic global system with no central authority or a staid EU dominated system that creaks and groans and only expands in tranches and only ever at snails pace.

In my estimation it's better if nation states can pursue their own natural cultural relationships in order to enhance trade rather than trade being controlled by the EU. While the world is gravitating more toward regional blocs the EU is the only one which insists on trade exclusivity and that's damaging for all EU members. Central to this is the federalist ideology and though some say the federalist ideology inside the EU has been defeated the institutions still work to that archaic design and show no sign of reform. The only thing that may trigger that reform is Brexit.

Some say we should not leave the EU and seek those reforms but we are dealing with a system that does not want to reform along with politicians who don't understand why it needs reform. This explains Mr Cameron's meagre demands. What was needed was a liberalisation treaty whereby member states could pursue their own avenues and negotiate exemptions, moving the EU more toward the Efta model. That though is counter to the EUs ambitions of harder and faster integration.

The very last thing the EU had in mind was reforming to become a more liberal institution. At best we would have seen that much vaunted two speed Europe but that would not have ended EU trade exclusivity nor would it have given the necessary tools we need to reform UK governance. All it would have done is put the UK into stasis while the Eurozone forged ahead with banking and full political union.

If they had intended on pushing none Euro members out into the EEA where they could seek their own trade agreements that might have been sufficient but that was never on the table because the one thing written into the EUs DNA is that once it has control it  never relinquishes it.

By leaving the EU, the UK will retain a deep and close relationship with the EU but will have afforded itself all of the tools it needs to play a more active role in the global community to bring about a global community of equals. A rethink of how we do things is long overdue and we'll be getting the relationship with the EU that we should have had all along. One where we have the necessary exemptions so that the one size fits all approach does not damage our culture and kill jobs.

For the UK, the EU model was never quite the right fit. Britain enjoys a position as a global business hub simply because our business culture is based on the rule of law and sanctity of contracts. We do things by the book. If we sign up the the rules we follow them. Rules on the continent though are more guidelines and aspirations - and this is most telling whenever you go out of major European cities and into the provinces. Britain can't work that way. We need a more flexible relationship and that is what we are getting form Brexit. One that we would not have got any other way.

Brexit does not exclude the possibility of close integration and as the process of globalisation shows, a central authority is not needed to bring about the free movement of goods and services and as for the digital market, this can only really be brought about through global cooperation. A European digital single market has yet to take form but is already being leapfrogged.

As to the free movement of people, that is a more sensitive area. It's a fine aspiration and we should seek to safeguard it but control of it must rest with nation states for their own security and peace of mind. It is unlikely that we will have a rigid and draconian reversion to full border control. It wouldn't work and it would not be popular in the end - but that is an argument we must win rather than imposing it on people without their consent. I would prefer things stayed more or less as they are but the idea that we are not in control of it is unpalatable. Even the hard liners have a point there.

Ultimately I think Brexit will give us all a new sense of urgency to rethink how we do things. If Britain is in control of the rules it takes from Europe and elsewhere then I can see attitudes improving and better relations with Europe - as a partner rather than a subordinate of the EU. I don't see the EU as community. I see it as a bureaucratic rogue non state actor running around making messes, the consequences of which member states have to deal with alone. At least now it must seek our consent and on the international level and we have a better chance at derailing its ambitions of becoming an actor in its own right.

I do not for a moment think that Brexit will come without a price and contrary to what Brexiteers say we are not out of the woods yet. We do have a huge mess to sort out and will have to work twice as hard to make a success of it but in the end I still think it is timely and necessary.

The relationship we wanted with the EU was never going to happen as a member and there was no reason to expect any radical reforms. Once we are out of the EU though we will find that we are better equipped to function in a world very different from the one the EUs founding fathers anticipated. Once we have reacquainted ourselves with the art of governing, we will wonder why we didn't do it sooner.

Brexit: no news is no news


This is a long post to tell you that nothing is happening. "Journalists" are busy inventing content to fill space but all of it is pure speculation built up on half understood concepts taking everything at face value. Boris Johnson and Liam Fox keep saying things but this should not be interpreted as anything other than noise. There is nothing to be read into any of it.

All the real Brexit effort is going on between officials. All of it is happening under the radar. Mrs May will be ignoring the Brexiteers for the same reason everyone else does. They have nothing useful to add. Instead she will be listening to foreign governments, various government departments and special interest groups. They will all be telling her roughly the same thing. If we cannot have single market membership (which is not actually ruled out) then we need as close as possible to it.

That means that officials will be breaking each concern down into various categories where they will in due course conclude that a comprehensive agreement is needed that covers ninety percent or more of the single market. It might as well be the single market but politically Mrs May would prefer to keep that as a fallback position. Politically she needs to cook up something that is single market membership that she can call something else.

She is also taking soundings on freedom of movement. She she knows that we will need a liberal regime that isn't too restrictive simply because a strict regime creates as many problems as it notionally solves. She understands that there is the capacity to inflict considerable damage for little or no gain.

With this in mind her officials will be cooking up a proposal and a time-frame for rolling it out. Diplomats and officials we have never heard of will be exchanging memos with European counterparts to establish the red lines. Some of these will be taken into consideration and worked into the proposal. Some will go up on the board as objects for negotiation. Both sides will be engaged in this process so that we can avoid extensive talks over minutia. The main talks will focus around the red lines and technical hitches. We may have to fold on some considerations in order to secure EU cooperation in overcoming some of the more legalistic difficulties.

This will be a very specific analysis and any reference to Switzerland or Canada will be to examine agreement frameworks to see where the potential crunch points are. The proposal will be very much a British option along with handover arrangements for agriculture and fishing. There will then be an agreement on implementing this agreement.

Whether it flies or not is really up to the EU and what they have in mind. If we are asking for most of what we want, leaving out only a few things we don't while making big asks on immigration I would expect them to decline it. I would. It should not be forgotten that the UK pulling out of various EU projects and peripheral programmes presents the EU with a degree of upheaval and expense and we will be given the choice of either continuing with participation or being asked to pay for the disruption. Given that we would then be paying for something we're not using, we might well concede to continue with participation.

As we go through the list line by line we will be asking where the political or material gain is from withdrawal. In this there is no question of staying in the customs union. If Britain does not have control over trade then it's just not Brexit. What's left will be what we go with.

In order to manage this relationship thought there will need to be infrastructure to monitor and implement it and to manage legacy complications further down the line. It will need a surveillance operation and and an arbitration mechanism. Looking at this as a whole it then starts to look like the EEA. The question for the EU is then whether it wishes to fashion a bespoke treaty infrastructure for the UK alone. It may wish to out of fear that the UK alongside Efta in the EEA could change the balance of power. That one will be a political estimation over which we have no control.

What we can say is that if we are leaving the single market then we will be going the long and expensive way to achieve the same thing as the EEA, adding yet another ring to the diagram above containing only the UK. We will keep up the pretence that we are outside the single market but will will still be tied to the EU regulatory environment, we will still be paying about the same and we will still have a very liberal immigration policy with the EU.

There is only really one reason why we would wish to go to all that trouble. Politics. To pretend we have left both the EU and the single market. Whether the EU will play ball is another matter. I see no reason why they should and were I them I would point out that they the UK can either swallow the lot with a concession on freedom of movement or go the hard way - which nobody serious wants.

This does not mean there won't be a savage public debate about hard and soft Brexit. It's ramping up right now. There will be a war of words. There will be reports of "Tory splits" and there will be high drama. Toys will be thrown out of prams and we may even see a resignation or two from the front benches. None of it, though, will have any bearing on what is being negotiated or how. This will be a purely managerial process trying to ensure maximum damage limitation while trying to save as much political face as possible.

The fact is that the WTO option is not going to happen except by accident through seriously maladministration - and every effort will be made by both sides to ensure that does not happen. There is no Canada Option. There is no Swiss Option. There is either the EEA or a shadow EEA that does the same job. Everything else is just noise for the entertainment of the media.

My own view is that the EEA is the path of least resistance and the path that will bring about the swiftest possible exit - and there is no point whatsoever in reinventing the wheel. The peripheral whinges about the EEA are mainly media mythology - and we would be better off making that case than going through a long and expensive pantomime. So long as we make it clear that the EEA is an interim position then politically it is palatable. If we attempt to do it all at once and set it in stone then we will make a real mess of it.

You can argue the toss over the nuts and bolts of it and make a meal over every nagging complication and you can piss and whine all you like about your own pet Brexit theory, but in the end the labyrinthine complexity and economic reality of Brexit dictates the agenda - and all signs point to a deep and integrated relationship with the EU. The rest is window dressing and everything in between is just politics.

For sure we will get our trade, aid, fishing, agriculture and energy policy back and we will take back control of employment law and most of the things us leavers wanted but the post Brexit-new Jerusalem is something that will have to be fought for and built over many years. Anyone who thought Brexit was the answer rather than the catalyst was kidding themselves. The Brexit that Brexiteers wanted died more than a decade ago. And that's actually no bad thing.

Tuesday, 27 September 2016

The EEA is the only sensible option on the table


If you're Daniel Hannan or one of the libertarian Toryboys you think that Brexit will usher in a new dawn of free trade and light touch regulation. You will frequently cite Singapore or Hong Kong as an example of how things can be. You will of course not mention the vast slums, the slave labour and the shoddy building practices that will see tens of thousands killed come the next earthquake. Nor will you mention that housing for ordinary citizens is cramped and overcrowded.

If you're an average Joe existing on a diet of Daily Express, Telegraph and Breitbart articles you could be forgiven for thinking Brexit will usher in this new dawn. Most people have next to no idea what is regulated, by whom or why. Very few fully comprehend the extent and depth of EU integration. Hardly anybody understands the various systems and regulatory mechanisms that make modern life tick along the way it does. And there's really no shame in that. It's normal.

It's only after three years of intensive examination of regulation that I have any real idea how deep the rabbit hole goes. Even now I am still bumping into new concepts hitherto unexplored. What one finds is that the EU most people are aware of is only the tip of the iceberg and there are many tiers of invisible EU which function as part of a tapestry of treaties, agreements and contracts. There are now volumes of regulations and rules governing things that simply didn't exist when we joined the EU.

In a lot of areas some regulation is better than none at all and if you were going to deregulate you would want to make damn sure you had something of equivalence to replace it with. In most cases we would find that the regulation that exists is eminently sensible. The problem is usually overzealous interpretation or misapplication. The only time anyone pays any particular attention is when it affects them directly. So we must approach Brexit with care.

The issue of Brexit as much a legal and technical one as it is political. It's as easy or as difficult as you want to make it. We could, as some suggest, rip up agreements and let the chips fall where they may but this would have severe consequences politically and economically. It definitely would cause a recession and we definitely would be poorer.

So the question then becomes one of how do we leave without causing extensive damage to our economy and international standing. That is not so easy - especially when the pragmatic conflicts with the political. If we were being ultra pragmatic we simply wouldn't bother leaving the EU. Doing nothing is always the path of least resistance. But that is not acceptable to the majority of people. So now it's up to politics to discern what is. An unenviable task.

The dilemma of politicians is whether to stand up for what is right or whether to bend to irrational demands for no political or economic gain. What most people expect of Brexit is to be out from under the dead hand of technocracy and into a simpler, less bureaucratic world. That though does not exist anywhere - and if it did we would hate it even more than the status quo. So before we go into Brexit talks we need to define what it is we seek to achieve.

For anyone on the right the big red line is trade. We also want to take back control of labour laws. EU rights and entitlements reduce the availability of work and in reality offer no real protection. Legislation cannot replace a competent and active union. There is also no good reason to have a one size fits all agriculture policy and local control of our seas is better for the environment. There are plenty of areas where a reboot of policy would do Britain a massive favour. The converse of this is that there are also a number of opportunities to shoot ourselves in the foot.

With that in mind we need to apply a certain degree of risk management. The juvenile nihilist in me might like to start unplugging things to see what happens but then we have to live with the consequences of whatever we do. And so it stands to reason that we would want to negotiate a flexible agreement whereby we could uncouple from the EU carefully and slowly. We are embarking on major surgery, plucking away at connecting fibres. Were we to look at the list of subject headings for consideration they would span into the hundreds.

We then have to consider the commercial concerns. The single market is not just a free trade area. Not is it merely a region of regulatory harmonisation. There are hundreds of intricate systems to keep it all running and to keep it fair and legal. Losing access to these systems has very real ramifications in terms of quality of life and economic prosperity. To put it in stark terms there is never going to be a full divorce from the EU for as long as it exists. When the EU is our nearest and most integrated trading partner there must be a high degree of convergence and cooperation.

Right now, if the Brexit department is doing its job it will be consulting industry leaders and lobby groups to see what they wish to retain. In this it will become apparent that access to and retention of EU decentralised agencies is extremely important. As much as they are valuable to us we have nothing we could replace them with. By the time any such analysis is complete we will find we want to keep most, if not all and the list of things we do want from the EU will be far larger than the things we don't.

We hear Brexit politicians talk about the Canada Option which is nothing more than a vague aspiration. To understand why this is considered an option you have to examine how Brexiteers think. They think the core component of the EU is the free trade area - which in their tiny minds means an agreement on tariffs. Everything else is considered peripheral and unimportant sundries which can be covered by "transitional agreements". It is only a matter of time before reality intrudes on this quaint interpretation. Britain will need something far more comprehensive.

So we have quite a job on our hands don't we? The chances of sorting all that out in two years are nil. We are talking about forty years of technical evolution conducted by an army of lawyers, politicians and technocrats. To forge an agreement we will start with free trade as a baseline. Then we are in the process of adding on the extras. They will number in the hundreds. Any miscalculation could cause serious and irreversible damage. Our end proposal will be so close to single market membership that it will look very much like actual membership.

This though, is exactly the kind of picking and choosing the EU has largely warned us against. For sure we do not take their opening gambit as gospel and the whole point of negotiations is to overcome red lines. But then we have to consider that to construct the EEA agreement it took eight years. Do we seriously want to devote eight years to producing something similar. More to the point, does the EU? If I were in charge of negotiating for the EU I would be extremely reluctant to reinvent the wheel and negotiate an elaborate agreement only to do what the EEA agreement already does.

The most obvious and most sensible course of action is to take the EEA agreement and negotiate a series of opt outs and waivers using the system of annexes it has. And yes, that includes reforms to freedom of movement. With it being its own entity with its own secretariat there is already the physical infrastructure to administer it and bring measures up for review.

This means we can have a slowly evolving Brexit where the final agreement is not set in stone and miscalculations can be negotiated. The very last thing we want is a static agreement with the EU or we won't be in a better position than EU members. There is no good reason not to use the EEA as a baseline - not least as a means to shorten the process and reduce the uncertainty and disruption.

Critics of this approach are wrong. The fact is that Brexit is too big and too complex to attempt it all in one go, total separation is undesirable and not achievable and in the modern world there is no such thing as regulatory independence. Banking and finance regulation most originates from global agreements, technical standards and industry regulations are not made by the EU and the EU is largely a recipient of regulation rather than the creator of it.

As much as Norway is consulted on new regulation it does have a system for influencing them and it gets more of a say than the UK by way of being an independent voice in the global forums where the rules are made. Britain free of the EU is no longer under the whip of it and can vote according to its own interests.

The EEA agreement is completely in line with Brexit. It takes us out of EU political integration, it gives us our trade policy back and makes us an independent nation in all the ways that matter. The deregulation fantasies of the Tory right are a red herring, immigration concerns can be addressed, and though we will continue to pay into the EU budget there was never any possibility of ending payments and it was grossly irresponsible of Vote Leave to make issue of it.

In most respects the EEA is as close to a silver bullet we are going to get. Doing it some other way may have some peripheral advantages but critics need to spell out what they are and present assurances that the trade off is worth it. They will find the advantages are minimal. They also miss the point.

The point of the EEA is that it does not have to be the final destination of Brexit. It is a living agreement whereby modifications can be made through a dedicated system and the process of Brexit can be continuous until such a times as we are satisfied. If we attempt a big bang Brexit then we could find that there is no going back on our decisions.

The notion that we can design an agreement from scratch ignores the reality that we are negotiating an exit with a lot of baggage to consider. The EEA can form the core of a Brexit settlement and in so doing take a lot of the contentious issues with the potential to derail talks off the table entirely. Doing it any other way would be completely pointless. Our approach should be to minimise the risks while securing maximum flexibility. If we do so we will find that our willingness to keep it simple(ish) will buy is a lot of good will.

The Brexit process is going to require a good deal of cooperation from the EU and will chew up a lot of time the EU would rather be spending in some other way. Brexit is not the only crisis on the radar. Diplomatic run-time is a finite resource and one we can save for the EU by using mechanisms already at our disposal.

If instead we open up every can of worms we create a number of hazards for the EU that could well see other member states engage in mischief making that damages not only the UK but also the EUs ability to function. While the nihilists on the right might like to see that, nobody is served by weakening the EU and exposing it to unnecessary risks.

The only real disadvantage to the EEA is that it is a difficult thing to sell - but that is really the job of politics and politicians. Their profession is to take unpopular decisions. This will require exactly that kind of leadership. We cannot and should not pander to the fantasies of the Tory right nor can we indulge Ukip's dishonest conflation of freedom of movement with open borders. To do so would be a gross act of political cowardice that will cost us dearly.

If the Brexiteers don't like it then that's really their own fault. Throughout the referendum they had every opportunity to produce a plan and it would have bought them a lot of influence. They declined that invitation. If now they find that someone else gets to define Brexit then they should take that up with Dominic Cummings and Matthew Elliott. They had their chance. They blew it.

"More freedom, more influence, and more support for its views"


Writing in Splash 24, a maritime trade journal, regulatory expert Clay Maitland has some interesting Brexit observations that regular readers will chime with.
For those with maritime interests, what happens at the International Maritime Organization, (it favours the American spelling) has relevance, significance, and – in this case – immediacy.

The EU has in recent years attempted to enforce group discipline, under which all EU member states hew to the Brussels party line. This has importance in two areas: decisions made at meetings of the IMO Council, its supreme chamber, and informally, in the give-and-take of consensus.

The United Kingdom (or whatever it may decide to call itself in future) has a more or less automatic elected seat on the council, which, I think, it is in no real danger of losing. But now that it is (note that, yes, I say ‘is’) free of the formal need to consult, and certainly obey, Brussels, there will be a subtle but big change in how decisions are reached, and what those decisions might be.

The second consequence is the reverse: Brussels (or rather Paris-Berlin) will no longer be obliged to consult, and often conform, to the views of Whitehall, and the City of London, as it did until last Thursday. No doubt the EU shipping policy directorate will, this week, be going over what pages to tear out of their briefing books.

Then there’s Greece, and particularly the influential Union of Greek Shipowners and its friend and neighbour, the (London) Greek Shipping Cooperation Committee. The Greek shipping community, and successive Greek governments, have always chafed under the policy whip of Brussels, which to most Greeks translates as ‘Berlin’. While Greece remains a member of the EU, the departure of the UK will be a powerful incentive to reject Brussels’ maritime diktats, at least those it doesn’t like.

Greek governments will have noted the fact that the British ministry of transport will be now be more welcoming to their sometimes nonconformist views on maritime regulation. The converse is also true.

Overall, there will be a paradox: Brussels’ control of a one-size-fits-all policy on maritime policy, at least at IMO, will be considerably diminished, within the bloc itself. Countries like the Netherlands and Denmark, though still charter signatories of the Rome and Maastricht treaties, have powerful maritime, banking and insurance interests. They, along with Greece, are likely to form an influential counterweight to Brussels. And they, after all, are still inside the tent.

So what we are now likely to see, ironically, is a more diminished Britain, except at IMO, where it will have more freedom, more influence, and more support for its views on maritime policy than it has in recent years. Surprise!
Except of course what Clay Maitland has probably not clocked by way of deformation professionelle is the fact that the IMO is not the only International Organisation where we are under the whip of the EU. There's the WTO, ITU, UNECE, Codex, ILO, FAO and ISO etc. And so if his analysis of the UKs position in the IMO is correct, and I believe it is, then it follows that the UK will have "more freedom, more influence, and more support for its views" elsewhere in trade and regulation. By that token it seems the only institution where we are actually weaker is in the European Union. Meh!

Globalisation is not dead. It's changing - and so must we.


Throughout the referendum I was reluctant to use the Daily Express as a source for obvious reasons, but a report from last Thursday is illuminating.
Up and coming nations in Africa and the Caribbean will no longer see any worth in being tied to dictatorial Brussels policies now that the UK is no longer part of the bloc. And they could be about to torpedo the EU’s roll-out of Economic Partnership Agreements (EPA), which are designed to create a free-trade zone between Europe, Africa, the Caribbean and the Pacific.
That is the view of top academics Christopher Stevens and Jane Kennan, from the Overseas Development Institute, who say Brexit has given many governments an excuse to pull out of the deeply unpopular scheme. Tanzania has already ditched a proposed deal between Brussels and the East Africa Community (ECA) countries, citing the “turmoil” engulfing the EU following the Brexit vote and the skewed terms of the agreement.

The country’s Foreign Affairs permanent secretary Aziz Mlima blasted: “Our experts have established that the way it has been crafted, the EPA will not benefit local industries in East Africa. Instead it will lead to their destruction as developed countries are likely to dominate the market.” And now the two trade experts have predicted that a number of other African and Caribbean countries will follow suit, because for most Commonwealth countries Britain is by far the biggest market for their exports.

In an essay on the future of Britain’s trade policy post-Brexit, the pair wrote: “Although some Africa, Caribbean and Pacific signatories have embraced the required policy changes, for many the whole EPA process remains deeply contentious. “The post-Brexit announcement by Tanzania that it will not proceed with the East African EPA is merely the most recent example of delay and backtracking on implementation.”

A number of countries have been stalling on implementing the trade agreements, agreed as far back as 2008, over concerns about the power they will hand to Brussels to meddle in national affairs. And the economists predicted that the Caribbean - held up as the ‘EPA poster boy’ by Brussels bureaucrats - could be the “first to split” and sink another key area of EU trade policy.

Even though Britain is no longer considered a “dominant EU importer” from Africa, Caribbean and Pacific countries it does still “absorb a significant share” of the goods those countries sell, they added. The news comes as Europe’s much-vaunted trade clout withers away, with Brussels staggering from crisis to crisis as it tries to close out a number of flagship deals. 
How much this can be put down to Brexit is uncertain. It may well be a catalyst, a political signal that the EU is on the wane. More likely, it is simply the excuse they've been waiting for. EU deals are considered far too invasive and make far too many demands that are really not the concern of the do-gooding set atop of the EU.

And indeed this further dismantles the oft repeated political meme that pooling sovereignty means greater clout. Bigger trade agreements are more likely to be controversial and drum up popular opposition. The more the EU makes them a flagship enterprise the more likely it seems they are likely to fail. TTIP is now in a salvage stage and many suspect it is stone dead.

The general trend is that the EU approach to trade does not work, the EU cannot deliver on trade and that "clout" is actually viewed as intimidating and a reason to be suspicious. Given that the EU is seeking invasive social reforms inside Africa, and the effects of such deals are asymmetrical there's no wonder African leaders are reluctant.

Underlying this though is something more significant. Trade economist Hosuk Lee-Makiyama says the drawn-out TTIP and CETA experiences demonstrate to would-be trade partners that the EU is a less reliable counterpart in negotiations, less able to agree a deal and less likely to implement a deal when agreed. We are witnessing the death of the big bang trade deal and such a blow means that the EUs days of trade exclusivity are numbered.

In some corners, this is being touted as the death of globalisation and Brexit is the first domino to fall. I'm don't buy it for a moment. It is changing but not dying. What we are seeing is a ramping up of global efforts to remove trade barriers - and in this technology rather than government is making the running. In this, global measures for customs systems are eating into the relevance of the EU.

Common sense and best practice is now driving the regulatory agenda which is no longer in the hands of the EU. UNECE is becoming the more relevant forum for improving value chains and trade profitability. That is not to say that the EU is no longer a power but it has been losing control of the regulatory agenda for some time and Brexit makes it all the weaker. And that's no bad thing.

This blog in the past has made the case that we are witnessing the birth of a new global single market in goods and services where regional regulatory codes are usurped by quasi-legislation. This is a quiet revolution where we see domestic legislative measures taken to ensure that technical regulation conforms to global standards and uses common regulatory platforms. No treaties or trade deals are required. Consequently the absence of trade deals post-Brexit is no indication that globalisation has stalled.

What it means is that trade has developed a life of its own where the process of trade is no longer wrapped up in highly visible packaging. Trade negotiations are now an ongoing continuum where the machine is steered by a process of barely visible, but significant increments. What this means is that nation states can opt into multilateral programmes and participate without opening up their borders to invasive diktats.

What we are now seeing, as per the illustration above, is smaller countries dealing direct with UNECE and Codex in order to enhance their influence over EU internal trade. And this is how Britain will operate post-Brexit, cutting out the middleman entirely. With the upcoming completion of the Trade Facilitation Agreement, the first multilateral trade deal in twenty years, there are now more liberal avenues to bring about greater international cooperation and integration. 

What this means is that going forward, big bang deals like TTIP are not needed. If anything the regulatory convergence in TTIP is to try to meld long established regulatory regimes with differing base philosophies. That was always going to be a nightmare and if the EU achieves anything at all then that is no small achievement. 

The more likely means of achieving the same thing is to simply wait for older regulatory codes to reach obsolescence. In a fast moving world within twenty years the crop of regulation that now exists, based on decades old systems will vanish into the ether. No new agreements are necessary because most nations will by then have agreed to use the same basic templates.

We have heard much in recent months from the EU about completing the single market. I take this as a soft propaganda campaign to convince us Brits to stick around. The problem being that EU measures on services have yet to mature and are now being developed in tandem with global measures. It makes no sense to be subordinated by the EU for the sake of completing the European single market when we can steer that agenda globally.

This is not to say that bilateralism is dead. That too is transforming, where we will increasingly see cooperation agreements between the UK and more culturally aligned allies to act as one on global trade forums. One idea doing the rounds is a CANZUK bloc which I assume to be a more informal Efta - which at the same time does not exclude the possibility of Efta membership. I'll leave you to be the judge of whether that is a worthwhile pursuit, but in a post Brexit world, there are any number of alliance configurations we can explore, none of them mutually exclusive - and can be fashioned on a sectoral basis rather than geographic blocs.

With the dawn 3D printing and similar technologies we will see a major transformation of supply chains as components are increasingly manufacture in situe and on demand. That means our trade concerns will increasingly shift to matters of intellectual property and patents.

This is why classic Gravity Theory might well be going the way of the dinosaur. Innovation centres will be in our gun-sights where geography and market size are not necessarily the driving factors. In this there are already an elaborate web of cooperation agreements between non state actors where a proxy deal can open up a world of opportunity. 

In that regard, whenever I see somebody talking about "trade deals" I tune them out. The real business of trade is happening off the radar. Remainers are going to be cock-a-hoop to see that Liam Fox struggles to get many flagship big bang deals chalked up on the board but that is not to say that Brexit cannot open doors and it doesn't point to failure. We have yet to fully comprehend the trade landscape before us. In this we are better placed than the EU which is still barking up the wrong tree and is failing to learn from the same old mistakes. 

In the end I think we are making the leap at the right time. The EU wasn't going anywhere and there is no real energy behind it. It is a most unloved and unlikeable institution built on a staid ideology from the last century. Right now we are seeing Poland pulling away from "Social Europe" and they are not alone in putting up walls to the EUs social agenda. Africa doesn't want it and nor does Europe. 

If the EU wants to survive is will have to make major institutional reforms and reinvent itself as a multilateral trade entity. Brexit will hasten that process existential enquiry which can only be a good thing, but Britain has better things to do than engage in parochial navel gazing. We have a job to do. With a new energy and a new found sense of urgency there is every reason to believe that Brexit will be a success. Then we will find that reports of the death of globalisation are very much exaggerated.